by Tyler Cowen
on February 27, 2016 at 2:52 am
1. Profile of Matthew Desmond, eviction genius.
2. Ryan Decker tweet storm on stagnation and inequality.
3. The United States seems to be moving further from recession risk.
4. Connie Chan and Clay Shirky podcast: innovation from China.
5. Honey badgers are magical escape artists (video).
1: The NewYorker had an excerpt from Matthew Desmond’s book in it Feb 8/15 issue; it was quite good. The excerpt was relatively short and did not attempt to draw social science conclusions so I can’t say how good the social science research is. But the quality of the writing was very good.
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Matthew Desmond should take his Genius Grant money and buy rental property in the inner city and become a landlord. I bet he’d develop a whole new perspective within a couple of years.
1. “.. . big thinking social reformer . . .” That pretty well says it all: how we got here and how the poor persist in desperation and destitution.
Desmond should get down with the poor. Sire four babies with four different women. Join a street gang. Smoke crack. Sell meth. Vote Democrat (no wait – scratch that). Mug people. Go to jail. Learn advanced crime techniques. Blame everybody else for problems. Get out of jail. Repeat the sequence.
Why not sell meth if you can’t get a job? Maybe you’re just a dedicated weight-loss advocate, looking out for the self image and wellbeing of teenage girls…
Not that I really mean that. But isn’t the implicit social contract something like “1) try hard, 2) get a job that pays OK, 3) have an at least OK life”? And when step 1 doesn’t lead to step 2, why should the person feel that they owe anything to anyone?
Seriously, the representation that people are poor because they are addicts, muggers, and generally inclined to criminal behaviour is back asswards thinking almost all of the time. FIRST there is poverty, THEN they try to make a few bucks selling drugs because they can’t get work, THEN some become addicts, etc., leading to the downwards spiral.
Don’t want poor people to get into drugs? Legalize drugs so they can’t make money selling drugs on the street. Don’t want muggings? A guaranteed minimum income where additional earnings are not clawed back would help.
Yes, these people should take responsibility for their own decisions, including hard time if they go too far. But to pretend that society fails no one, that no one slips through the cracks despite their best of intentions, and that the poor and criminalized are 100% “deserving” of their situations is a matter of folklore from the far right, not an accurate representation of reality. It is a long and hard road out of the ghetto, and an awful lot of people never make it out despite their best of intentions and generally well-directed efforts.
Is it still not that the case that if you finish high school, find a job (any job), don’t commit crimes that land you in prison, don’t drink or do drugs, and don’t have children out of wedlock or before age 21 that you are very unlikely to end up in poverty in the US? I say this as someone who votes regularly for Democrats, and does believe that the US doesn’t give a fair shake to way too many people. I think that the feeling that people who don’t follow the life script laid out above have broken the social contract themselves is a totally legitimate feeling. However, given how one person’s problems became the problems of their family and their community, I think that conservative policy prescriptions are counterproductive and harm people of modest means who have done nothing wrong but cannot help but be effected by the problems within their families and communities.
“FIRST there is poverty”
It’s the culture, stupid. Lavishing money on people lacking good character is flushing money down the drain.
There are those.
Are you willing to abandon the millions of others who eventually become highly productive participants in the economy, just to spite a handful of lazy ones? And anyways, the comment was relevant for explaining how drugs often enter the picture, not poverty in general.
I thought #1 was going to be about Toyin Bello founder of Click Notices one of a number of companies who specialize in fixing the eviction problem. Toyin and his staff are actually trying to fix the one of the issues with low income housing, this Desmond character is simply peddling claptrap for mid to high income liberals. I’m pretty unimpressed.
1) Outrageous that anyone would earn any positive sum of money advocating for the poor. Only people who advocate for the rich should make money, because market signals are the be all and end all of what is worth advocating for, and if someone’s gotten screwed so many times that they can no longer advocate for themselves this is evidence that they are not worth advocating for.
2) “almost everyone has power, water, sewage, manure-free streets, & basic healthcare”
When this remains untrue of billions of people, “almost everyone” is really not that true. Between China and India along, you have nearly 2.5 billion people who are not assured of remotely decent basic health care unless they have personal resources to get it.
5) Very cute, but I’m not sure about the characterization that the honey badgers saw it as a “game”. Perhaps they like freedom?
On #2, I think he is talking about inequality within developed countries (“That claim implies that differences in substantive living standards between developed-country rich and poor today are minor…”)
Certainly, the gap between the Top 1% and the next highest 1% is not that the latter do not have access to electricity, plumbing, sewage, autos, and basic healthcare. In any event, would you agree that any reasonable discussion of inequality, whether within developed countries or globally, should focus on the inequality between those that have these basics and those that do not? That does not seem to be the case with anyone that talks about the “Top 1%” vs. everyone else.
I think the top 1% is a special sort of issue, since they seem to be amassing obscene gains relative to the post-WWII norm.
Also, a similarly, I do not think that inequality considerations should exclude relative inequality, due to the fact that this has major ramifications for the ability of different groups to advocate for their interests in a dynamic market and democratic system.
However, in discussing poverty and inequality, the big picture of massive gains with respect to absolute poverty should always be presented as a major part of the story. There’s still a long ways to go, but these last 50 years have seen the most rapid advances for the largest number of people ever in history.
This year’s Nobel Prize winner in economics was a major early mover in analytical methods which are conducive to empirical analysis of precisely the sort of perspective you emphasize here, and I agree that it is really important. A lot of this comes in the form of “multidimensional poverty indicators”. A lot of multidimensional poverty indicators define some basket of very basic goods, and the score of this indicator is determined as a function of the number of these very basic goods that they can access. Scholarship in refining these methods and applying them to different national and cultural circumstances abounds now, and you’ll find an enormous amount of research and empirical evidence using a quick Google search. There’s always a bit of a fudge factor, e.g., is the “basic good” a distance from a water source of 1km, 5km, etc., or should they include access to ANY vehicle including a bicycle or shared transit, etc. It has the added benefit of focusing on consumption rather than income, which can be hard to impute a market value for, for much of global poor.
“Also, a similarly, I do not think that inequality considerations should exclude relative inequality, due to the fact that this has major ramifications for the ability of different groups to advocate for their interests in a dynamic market and democratic system.”
What important interests it almost everyone has power, water, sewage, manure-free streets, & basic healthcare?
1. and 2. The contrast couldn’t be more stark. Decker may have a legitimate argument to make but his tweets make him appear an idiot. Placing his tweets next to serious scholarship by Desmond exposes Decker’s unseriousness.
He appears that way because that’s what he is.
Or maybe they’re both right.
1 & 2. Ryan Decker says inequality isn’t a problem, since everyone can afford $10/month for a cheap prepaid cellphone plan. But Matthew Desmond says they can’t afford $550/month for rent. If you can’t afford the rent, cheap calling plans are of little use to you.
Actually it seems cell phone ownership and use is common among homeless teens at least. I’ve also noticed a fair number of homeless at central libraries in DC and Baltimore that hang around to use the computers (and sleep). Tech and communication are important is the point.
One of the things that I find truly striking in observing the decisions of the global poor with regard to mobile technologies is how critically important communications, interconnectivity and access to information are to us humans. While one might try to explain this in terms of the economic benefits of networking and access to information, I don’t think this comes remotely close to a satisfying explanation. There appears to be a much more deep-seated “need” for communications than I think many would have predicted. The number of people I’ve met who live in a mud house and who defecate in nearby pastures or old fashioned pit latrines, but would upgrade their phone before considering improvements to their otherwise rudimentary living conditions …
Go back 20 years, and I don’t think you would find anyone predicting the sorts of mobile phone penetration rates that has been observed in the developing world.
Very true, and buying a girl a cell phone in the Third World is a good way to get laid without shelling out cash. BTW I think Decker is wrong about nobody exposing what Gordon says is false by pointing out quality of life now vs 40 years ago; Decker’s arguments are not novel.
I am a landlord with white tenants, many of whom are falling out of secure middle class existences, and are now struggling to keep their heads above water. Some of my tenants are over 65, on fixed incomes, that they supplement with part-time jobs, and have still not learned not to buy big ticket items they don’t need, with money they don’t have.
These folks are constantly late with their rents, because they “had” to take a vacation, pay a vet bill for a sick cat, or pay for auto repairs for a vehicle they have financed with 16% subprime auto loans, etc, etc. It is the below market rents they owe me that have become their overdraft accounts. I’ve let one tenant, who developed prostate cancer, go more than a year without paying.
Others in the business have called me an idiot for becoming too concerned with my tenants personal problems. My new tax accountant asked my why I had developed a money losing business model. I told him that the rental losses offset some of the gains I make flipping vacant lots. He told me that I need to flip more lots.
When I go through the easy to use, self checkout stations at the new Walmart, I can’t help by worry that automation will make things even tougher for my under employed tenants in the future. And the average landlord’s future may not be all that rosy. either Rents, like incomes, are no longer rising in my area, but property taxes and property insurance and flood insurance costs are rising rapidly. This year alone, property taxes have increase 34%.
The whose “on a fixed income” thing is dumb to begin with given that many working people don’t have opportunities for overtime or bonuses. And anyway fixed could fixed very high. But it is especially dumb when coupled with “that they supplement with part-time jobs as that indicates that the incomes weren’t fixed to begin with.
John, the incomes are fixed (Social Security, pensions, etc), but the cost of living, not so much.
“John, the incomes are fixed (Social Security, pensions, etc), -”
Social Security is adjusted for inflation. It’s fixed in the same way someone working a steady job with no overtime is living on a fixed income. If you are living off of bond income and/or a non-inflation adjusted pension then you have a fixed income (or that portion is fixed).
SS recipients get cost of living increases. Are there cheaper apartments near you?
Presumably he has more than one tenant and not all their situations are identical.
Maybe they feel like they have to make these purchases (vacations, cars, big ticket items) because of all the commercials they watch. We have equality of entertainment options but the commercials are not selling to equally wealthy people. If you’re poor and on a fixed income, there’s a good chance you’re sitting at home watching TV for a good portion of the day, repeatedly bombarded with aspirational images of how great your life will be if you buy more of the products depicted.
I’m pretty sure the causal arrow is much more significant going the other way: Watching lots of TV —> poverty, with a minor feedback loop.
To me, proof that the safety net has become a hammock lies the in refusal of many poor (outside of those primarily watching children) to even consider entry level delivery/truck driving jobs. In their minds, there are huge negatives to such work: physical activity, working alone, accountability, drug testing…
Good on you, rich.
Have them watch this video:
or read this: http://earlyretirementextreme.com/how-i-live-on-7000-per-year.html
1. Interesting stuff. Also the New Yorker link above. The rent floor seems to be $550. Is that still the Section 8 voucher for 2BR? That seems to be part of the housing problem in many cities.
I have several rentals. Like Rich, above, most of the issues are poor impulse control rather than some legitimate hard luck story. I have one tenant who is always late because either she’s traveling or taking care of her sister’s problems. She drives a cheaper mercedes.
One thing about the article is that Desmond makes it sound like the landlord is just looking for a reason to evict. No way close to true. Eviction is a PIA process that the landlord always loses money on. You can easily blow a year or two’s profits from that unit by going through an eviction.
One thing about these sociologists is that they seem almost naive.
Like the idea that someone could have poor impulse control is completely foreign to them.
Anyone with a realistic understanding of human behaviour would not become a sociologist.
Re: the tweetstorm on growth – Robert Gordon certainly seems aware of inequality. He claims that inequality is one of the causes of this low growth, though. So if Decker’s point that low growth means inequality isn’t a big factor, something seems contradictory here.
(I did not read the Gordon book but I did watch this:
There is no contradiction – Deckers point is that Gordon believes that there has been little technological progress since say the 1950’s, since almost everyone now has access to the same technology then there can be little consumption inequality. Gordon’s point is that the slow growth in technology means that there is great income inequality, which is a different thing to consumption inequality.
Think of it this way, you and your rich neighbour both drive cars, you drive a Chevy Nova, he drives a Mercedes Benz. Gordon claims that there is not really any technological difference between the two, they are both cars that transport you from A to B. So in that sense you and your neighbour are equal (Deckers point). But your neighbour still earns more than you, and because there are no new technologies being developed, he is likely to continue to do so – not sure I understand why – but that’s Gordon’s point.
Myself Gordon’s theory is a classic incoherent mashup of the no true scotsman fallacy mixed with trendy concerns – I think in the age of smart phones, internet etc, to claim we are in a technological slowdown is simply stupid.
My take-home from 2. : Twitter is really not a media suited to expressing interesting ideas.
Yes. The stream depends on Gordon being right, and there is no room for any discussion of why the author finds him convincing.
(My shallow reason to disbelieve: I heard Gordon in a radio interview and found his defenses against internet technology entirely too defensive.)
The premise that people who provide housing for the poor ruin the lives of their customers, or help make people poor is total BS. It was BS when Riis wrote How the Other Half Lives. He started a campaign against Trinity Church in Manhattan that went on for decades, until Trinity gave up the fight and tore down several hundred historic townhouses like the one I currently live in, and destroyed my neighborhood.
The way this works is to create a narrative that ties into existing preconceptions. How the poor live is always shocking to the middle class. Riis did not consider that in his time, before the Great Society, poverty was usually temporary. But he gave the middle class the chance to be titillated by the poor, and look down at them, and to also look down at the rich who rented housing to them. I don’t see how tearing down several hundred homes and turning them into manufacturing buildings benefited the poor? Do you? All that happened is that Riis and others became famous and had careers. Too bad for the housing for the poor, and the historic buildings, that disappeared.
My family growing up owned marginal rental property in Manhattan. If you think that is a lucrative business, even a viable business for most people I urge you to try it.
Over time, affordable rental housing for the poor has basically become illegal in NYC and places like it. With the best of intentions. It wasn’t the real estate industry that made affordable housing illegal. It was government, with the support of Democratic voters.
So believe what you want, believe that this book will give you new and unique insight to problems as old as time and as intractable as human nature. But, based on my knowledge of both history and real estate, it will only peddle alluring half truths and misinformation.
Agree – the hero of this story is the entrepreneur working hard to provide affordable housing for poor people. The sociologist is simply peddling one of the oldest myths against capitalism, that it is extractive. Great harm has been done by this fallacy to society over the last 200 years. We should condemn it whenever we see it.
Here’s one such entrepreneur who can build affordable housing units in Portland for $65k – 1/3 the cost of ‘Government’ Program units.
Props to Portland for letting this guy compete against welfare statists. The aptly named entrepreneur, Mr Rob Justis, would probably end up jailed or with broken kneecaps if he tried his business model in Manhattan.
#1. Not saying his research isn’t valuable, but like Alice Goffman he sees racism everywhere.
Is this common among millenials?
#1 According to University of Florida prospective students living off campus should budget about 11,720 for living expenses. Minimum wage 7.25 * 35 *45 = weeks = 11,418.45. The students live quite well on that. I live in Gainesville FL, home of UF, you folks in other places need to allow builders to build as many smaller cheaper appts. as need to drive the rents down to $300 or $400/month.
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